Gabelli among Financial Players behind AWS Bids
A company owned by Mario Gabelli filed a short-form application to bid in the Aug. advanced wireless services (AWS) auction, according to records made available by the FCC on its website. Gabelli plans to participate in the auction as a backer of Lynch AWS Corp. The records provide ownership information on 252 companies filing short-form applications to participate in the auction.
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N.Y. financier Gabelli is expected this week to settle a civil suit by DoJ charging that in past auctions he used sham small business affiliates to buy spectrum at reduced prices. FCC officials cited the Gabelli case when tightening rules on designated entities’ bids in the Aug. auction (CD Jan 18 p2). “He’s not giving up yet,” an attorney tracking the auction said, adding however: “I don’t think anybody expects him to be a big competitor in the auction.”
As expected, rural companies and groups made up of small phone companies are the largest group of would-be bidders, the FCC data show. For example, bidder VAL-ED is backed by such small phone companies as East Otter Tail and the Barnesville Telephone Co. Nontraditional players like Google and Yahoo appear to be sitting out the auction. But cable companies may bid through Spectrum Co.
Satellite video providers may seek terrestrial spectrum through Wireless DBS. EchoStar and DirecTV -- known since Dec. to be cooperating on a wireless broadband venture (CD Dec 5 p2) -- will bid in the AWS auction under joint venture Wireless DBS, according to short-form applications. Officials from both satellite firms declined to comment on plans for terrestrial AWS spectrum, citing FCC anticollusion rules.
Venture capitalists also may play, based on short forms. One argument made by Council Tree and other companies opposed to revised DE rules was that tight rules on sale of spectrum bought with bidding credits would ward off investors.
For example, NextWave founder Allen Salmasi and current companies NextWave Wireless and NextWave Broadband are backing bidder AWS Wireless. Bidder Royal Street Communications II is backed by such investors as Madison Dearborn Capital Partners, among the nation’s largest private investment firms. Atlantic Wireless is backed by Abrams Capital, Fortress Investment Group and Charles Townsend, CEO of Aloha Partners, which has bought up 700 MHz spectrum nationwide.